Is early business growth and expansion a good idea?

Happy Monday Steemians

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I have been in a position where a business has grown rapidly in its first couple of years and faced the question of whether or not to expand to push growth or remain the same but improve service. Recently I was asked about this subject regarding my climbing business.

At just two years old we are still in a period of natural growth as more people find us online and via word of mouth. But already we are so busy on an evening that people leave without climbing because it is so crowded. As such I was asked if I had plans to expand. Obviously this is something that had crossed my mind a number of times but the justification for such a large project so early on was difficult to agree on.

Ideally in any business I would not recommend large scale expansion until the business has sustained steady profits for three consecutive years. Thus I have my first black mark against expansion. Next is the question of the business plan and financial forecasts. Are we own track? has development been taken into account? and can the forecasted profits sustain development outlay without an increase in income? In this instance all data suggests we are way ahead of target but obviously the data set is short, and forecasts are speculative at best.

With the above in mind the only option for me personally is to take a more human approach, listen to my gut and make a decision. There are always unknown elements in business planning and the idea of taking a gamble on something which is currently fine as it is is a scary prospect. In the same breath though I took a risk opening the business in the first place, and as such the gamble is worth taking. Do I think it will succeed? Yes - Data suggests customer numbers are growing fairly consistently, which means added space will undoubtedly allow for continued growth. Will development increase turnover / profits? - Maybe - Initially fixed costs will increase, borrowing will increase and profits will decrease. However, taking a longer term view, if business continues to grow then we will secure our position longer term by not allowing a market gap to appear for someone else to try and capitalise upon.

The long and short of it is that as business owners and entrepreneurs we have to be willing to take risks, albeit educated risks and be ready to adapt to change. A business that stands still will stagnate and gradually become irrelevant. Build data from day 1, learn how to analyse it and then make sure you don't follow the data so strictly that you remove natural instinct.